Selling mattresses used to be an incredibly capital-intensive proposition. You needed real estate, a storefront, stock in the store and salespeople. Only a few chains of mattress stores and department stores sold them.
Then, the Internet happened.
When the now-giant mattress company Casper launched in 2014, they took advantage of the fact that a brick-and-mortar store is no longer required to sell to customers. A massive physical presence is no longer a requirement to compete in a market, meaning that Casper could immediately come in and compete with mattress and department stores, without the massive capital investment required to compete in the market with physical stores.
Today, six years later, they are the 7th largest mattress retailer in the country.
The Internet has been doing this for years — knocking down barriers to entry and letting innovation flourish. The tools that Casper used to break into the mattress market in a big way are available to everyone. And that’s the history of the Internet in a nutshell: it makes opportunities that were previously only available to few now available to many.
And it’s happening in insurance next.
The digital tools that used to only be available to VC-backed startups who invested millions to build them are becoming available to all agents. And it’s turning the insurance industry inside-out. The ripple effects will be felt for decades
To be clear, insurance agents are never going away. They are the experts who help the average person or business owner properly buy insurance. Most people wouldn’t make decisions on their investment portfolio any sooner than they would try to remove their own appendix. And insurance is the same way: it’s a complex product that requires training and experience to buy and sell intelligently.
The problem is that right now, most agents don’t have the technology to effectively meet the needs of consumers who are accustomed to delightful online experiences. They have the personal piece down pat, but this is only half the battle. The future requires a human touch augmented by technology to remove frustration, redundancy and unnecessary work from the process. The future is better.
The real threat is that the existing agency system is incapable of adapting fast enough, leaving insurtechs and direct-writing carriers to step in and take all of their customers. Agency independence dwindles, leaving customers with fewer choices and a poor customer experience.
Fortunately, the Internet is once again intervening.
Digital agencies are the wave of new technology-enabled insurance agents who have a digital customer experience and workflow to support their customers in the way they expect to be supported, while retaining that human element and expertise that is irreplaceable.
Digital agencies are freed to be more creative with their marketing and advertising, selling into specialized niches to deploy their expertise much more freely. They interact with connected carriers who make their products available to digital agencies to sell through their digital tools.
Digital agencies still have the same people who power the insurance industry today: producers, account managers, claims advocates. Only now, they are augmented by technology that helps them scale to more customers and more segments without missing a beat.
- Digital agencies are universally connected to their policyholders and their carriers. This allows information to flow back and forth in real-time so that customers aren’t waiting on manual processes to complete to get the end result.
- Digital agencies own the customer experience and are the face of insurance to the customer. They don’t hand off digital touchpoints to carriers or anyone else. They control their own destiny and their own customers.
- Digital agencies optimize their book by up-selling, cross-selling, and interacting with their customers more regularly and in an automated way. They step in when and as-needed, and otherwise let their technology manage the day-to-day logistics.
What this means is that digital agencies are freed to do what they do best: sell insurance. Agents should be creative, thinking outside the box about new and better ways to reach their current and potential customers. They should be inventing new vertical specialization and sales programs and using that to drive their growth both internally and with their carriers.
This is literally happening right now. At the Internet of Insurance, we are bringing world-class technology to independent agencies, starting in Minnesota and Wisconsin. The type of technology that used to be only available to a handful of insurtechs is now available to Big I members in those two states and, soon, across all 50 states.
When the digital tools that used to cost VC-backed startups millions to build become available to every agency, what happens? Digital agencies and connected carriers create the ability to sell insurance cost-effectively, in differentiated ways, with a great customer experiences changing the insurance distribution landscape